Problem related to the inventory errors

Reference no: EM13767508

At December 31, 2014, McGlaggen Corporation reported current assets of $638,000 and current liabilities of $384,000. The following items may have been recorded incorrectly.

McGlaggen uses the periodic method.

1. Goods purchased costing $10,000 were shipped f.o.b. destination by a supplier on December 26. McGlaggen received and recorded the invoice on December 31, but the goods were not included in McGlaggen's physical count of inventory because they were not received until January 2.

2. Freight-in of $4,000 was debited to advertising expense on December 28.

3. Goods purchased costing $11,000 were shipped f.o.b. shipping point by a supplier on December 28. McGlaggen received and recorded the invoice on December 29, but the goods were not included in McGlaggen's physical count of inventory because they were not received until January 4.

4. Goods held on consignment from Brown Company were included in McGlaggen's physical count of inventory at $13,000.

Instructions

(a) Compute the current ratio based on McGlaggen's balance sheet.

(b) Recompute the current ratio after corrections are made.

Reference no: EM13767508

Questions Cloud

Measurement and basis of accounting : Question 1. Fiduciary funds are to use which of the following measurement and basis of accounting?

Create a function file that computes the distance : Write a function that accepts temperature in degree Fahrenheit and computes the corresponding value in degrees Celsius. The weight force must balance the spring forces at this new position.

Michael is a professor of biology at devry university : Michael is a Professor of Biology at DeVry University and has collected "30" largemouth bass from "4" separate lakes to get weight distributions, measure of girth, and length. He currently has the data saved in a Microsoft Excel workbook with data fr..

A discussion on improving the technology : You work at a High School. The High School currently lost their IT specialist and are in the process of hiring a new one. In the meantime, you were asked to join a discussion on improving the technology at the high school based on your background and..

Problem related to the inventory errors : At December 31, 2014, McGlaggen Corporation reported current assets of $638,000 and current liabilities of $384,000. The following items may have been recorded incorrectly.

Rolls presents a model of visual consciousness : Rolls presents a model of visual consciousness. Mandik presents his view on the neurophilosophy of consciousness. In your opinion, is Rolls''s model a trivial or substantive view of consciousness?

Scores on the math sat exam : Suppose that scores on the Math SAT exam follow a Normal distribution with mean 500 and standard deviation 100. Two students that have taken the exam are selected at random. What is the probability that the sum of their scores exceeds 1200?

What is the minimum number of points one must score : If the results on a nationally administered introductory statistics exam is normally distributed with a mean of 100 points and a standard deviation of eight points determine the following: a. describe the graph of the distribution b. find at the Z sc..

The wall street journal reports that the current rate : The Wall Street Journal reports that the current rate on 10-year Treasury bonds is 7.85 percent, on 20-year Treasury bonds is 8.45 percent, and on a 20-year corporate bond issued by MHM Corp. is 9.95 percent. Assume that the maturity risk premium is ..

User Account

All Pages